Group 2Created with Sketch.Group 2Created with Sketch.car-accidentGroup 2Created with Sketch.drugsGroup 2Created with Sketch.ShapeCreated with Sketch.googleplusCreated with Sketch.productsreal-estateShapeCreated with Sketch.slip-fallssdtwitterCreated with Sketch.veteransworkers-compsocial_wrongful_deathCreated with Sketch.youtubeCreated with Sketch.

Blog

Social Security planning further complicated by spousal benefits and taxes

by Staff | November 16th, 2011

It’s not only when to collect our Social Security that is confusing, but also how to collect spousal benefits and taxes that can complicate Social Security planning, reports Investment News.

Individuals must be married for at least one year before they can qualify for spousal benefits. Divorcees must have been married for at least 10 years, and the spouse filing for the benefit must not have remarried.

A regional director at the Principal Financial Group Inc., James Robinson, presents two strategies for spousal benefits: “claim and suspend” and “claim now and claim more later.”

“Claim and suspend” allows one person to begin taking his or her share of spousal benefits and permits the other spouse to suspend payments to allow the income to grow. Both individuals must be at retirement age.

“Claim now and claim more later” works if one spouse receives spousal benefits but holds off his or her own Social Securityand then reaches an age where that monthly payment is larger than the spousal benefit he or she is receiving.

“That individual can then claim the larger benefit,” Robinson said.

Again, things can get complicated because benefits are still subject to taxes.

If the provisional income is more than $25,000 for singles or $32,000 for married couples, a portion of the Social Security check will be subject to taxes, according to Investment News.